Eisai: UK gives pharma a poor deal, may invest elsewhere

The Japanese government warned shortly after the referendum last year that its domestic pharma companies may consider pulling investment as a result of Brexit, saying the country will lose its appeal as a pharma R&D hub should the European Medicines Agency relocate.

Now Japan’s Eisai, which has invested £1.3 billion in the UK including a factory in Hatfield, has given the strongest indication yet that it might take its money elsewhere.

This is despite the government’s sector deal for pharma in the industrial strategy, and warm words and public commitments to make Britain a world-leader in pharma R&D in order to boost economic growth.

[caption id="attachment_16759" align="alignnone" width="138"] Gary Hendler[/caption]

Eisai's Gary Hendler, head of the firm's European operations, argues that his company is exactly the kind the UK government is targeting with its industrial strategy and special “sector deal” for pharma. However he thinks that in future, the pharma may consider investing in other countries, such as China, after Brexit.

The poor commercial opportunities and relatively small size of the UK pharma market – around 2% of the global branded market – count against the UK as a place for further investment, although Hendler stopped short of saying that Eisai was considering pulling out altogether.

“We don’t feel that we are getting a good enough deal,” he told pharmaphorum in an interview.

Hendler is losing patience after NICE delayed its review of thyroid cancer drug Lenvima (lenvatinib) for two years because of a shake-up of its operations, only to reject it in draft guidance along with a rival from Bayer last month.

In the UK, Eisai has already lost three out of the ten years where Lenvima has patent protection as a result of the delays, Hendler said.

Although NICE recommended funding for Eisai’s Halaven (eribulin) in third line breast cancer last year, it last week rejected its funding for its use in second line breast cancer because of uncertainties in clinical data.

Hendler said the company’s disenchantment with NICE, and long-standing issues regarding use of novel drugs on the NHS, could affect investment decisions in the future.

Hendler said: “We don’t think that the commercial environment is good. That commercial environment is critical and if that does not get taken care of, I don’t think the government will every get another chance.”

“There is a real opportunity at the moment to make sure that happens. There is an opportunity to do that in Brexit, and I hope the government takes it.”

NICE focused on price, not value

Reform of NICE should be a major priority for the government, which should attempt to reward innovation from pharma instead of using NICE as an instrument to extract price cuts from drug companies, Hendler said.

He highlighted a trend where NICE is assessing competing drugs at the same time – a strategy that he says allows the Department of Health to secure deeper discounts before recommending funding from the NHS.

Lenvima was assessed at the same time as Bayer’s rival thyroid cancer drug Nexavar, and the likely scenario is that the companies will have to drop their prices further before a final draft is published in order to secure funding.

When NICE assessed two rival breast cancer drugs from Novartis and Pfizer, both manufacturers dropping their prices in confidential deals with the Department of Health, Hendler noted.

Hendler said: “They are playing one off against the other to get a lower price.”

Rather than assessing the value of a drug to the NHS, Hendler argues that NICE is purely focused on securing price cuts.

“We are concerned that they [NICE] don’t really value innovation, it is all about driving the price down. They really want more confidential discounts from the manufacturers.”

He argued that “uncertainty” has become a “buzzword” with NICE that is now being used to drive prices down when assessing drugs.

Hendler concluded: “You tell me why, when they continue restricting access and driving prices though the floor, we should continue to invest here?”

NICE response

In response to Hendler's comments, NICE said it is incorrect to suggest that companies were 'played off' against each other, either by the Department of Health or by NICE.

Topics are planned into the work programme based on the licensing plans of manufacturers, NICE said.

A spokesperson said: "The Department of Health is not concerned with the level of discount provided, as this is considered by NICE as part of its assessment of cost-effectiveness."

Addressing Hendler's concerns over uncertainty in data, NICE said its independent committees are advised to be certain about benefits of a drug, as health benefits will be displaced from other services.

The NICE spokesperson added: "Where the technology concerns a drug for cancer, there is the opportunity for it to be included in the cancer drugs fund, which allows committee to accept a higher degrees of uncertainty."